Internet Bubble 2.0 – Yahoo and Abrite

The Bubble version 2.0 isn’t quite so severe

Maybe after 1999 we all saw this coming. The stock price to earning valuations never got quite so crazy again, and there weren’t nearly as many stories of startups with questionable business models getting insane levels of venture capital.

If anything, the internet and website building business had been spared by the fact that most of the investors and speculators had rushed off to “safe” bets in housing and equity derivatives.

But there was still a monetary expansion, and some of that “cheap money” found its way to Silicon Valley. Now the monetary expansion is over (unless the ‘bailout’ works as planned – which I kind of doubt at this point) and that means at least some of those funds are dwindling.

This will probably be the first in a series of posts about the mini-bubble popping online. Really, it just means a period of re-organization, trimming expenses, and retooling business plans so they make more sense and deliver better value to investors and shareholders. Jobs will get cut and executives will probably see pay declining – but at the end of the “crisis” the consumer should have a better product available at lower costs.

Yahoo To Cut 1,500 or More Jobs

Oh Yahoo, how have you failed? Let me count the ways…

Blame any sort of management or blundered deal you like, but the root of the problem is that Yahoo’s search results just haven’t been as relevant as Google’s. At least not in my opinion, or in the opinion of ex-Yahoo surfers who are jumping ship and delivering more search market share to Google.

OK, so they’ve tried to focus on the community thing and there are some mixed results there. Answers is pretty fun and they’ve created (and acquired) a lot of online communities that could be interesting for webmasters and website publishers. But what is a webmaster community without some link love!?

Anyone this big needs to automate how they moderate community interaction – and this typically means a blanket ‘nofollow’ policy on user-contributed links. Frankly, this won’t stop spammers – it just means you’ll get fewer intelligent webmasters dropping links – and it means that you’re devaluing the legitimate endorsements that users give to sites and pages they don’t own or have an interest in.

So Yahoo is losing out on participants. They’re losing out on advertisement revenue.

Why the heck didn’t they take the Microsoft deal?

Adbrite Lays off 40% of Staff

The history here Is something I had to learn more about myself. Adbrite is a PPC advertising network, but originally it was a founded as a domain ‘’ that covered the news of the first tech bubble and all of the corporate casualties of the ’99-’00 crash.

No, the irony of the situation isn’t lost on anyone. Nor is it really the end of Adbrite. They’re still one of the biggest servers of advertising on the internet, and eliminating staff is just going to help them contain costs and boost earnings in the long run.

The big casualty here is the people who individually lose a job – and some anecdotes from Adbrite publishers suggest that customer service has been harder to get (wow, they had customer service for ad publishers to begin with? That’s actually pretty impressive, even if it ultimately doesn’t fit into a profitable business model)

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